By Pat Nolan, Senior Vice-President, DVL Public Relations & Advertising
April 26, 2013
IN OVERDRIVE FOR DAMAGE CONTROL; ON A SHORT LEACH; TO KEEP TENNESSEE FROM AN INCOME TAX; THE SUPER MAJORITY: TENNESSEE'S BE-ALL AND END-ALL; AND SO IT CONTINUES; THE BUDGET; REAL OR FAKE; PROGRESS; JOE CARR ON INSIDE POLITICS
IN OVERDRIVE FOR DAMAGE CONTROL
With a federal criminal investigation ongoing, top officials of the Pilot Flying J Company (a business owned by Governor Bill Haslam's family) put themselves into overdrive for damage control this past week.
The Governor's brother and company CEO Jimmy Haslam publicly announced a series of moves to try and address the scandal, including making personal visits to trucking customers to try "make things right" (even re-pay them) if they think they've been shortchanged by the company through deliberate underpaying of fuel purchase rebates. At least one customer went to court instead filing what it hopes will be a class action suit against the company that other trucking firms will join. Indeed, THE TENNESSEAN reports on line (April 26) that additional class action type lawsuits have been filed in federal court in both Arkansas and Alabama to join the first one in Georgia.
Lawyers in the Georgia suit also allege Jimmy Haslam's personal outreach efforts to trucking company customers amount to witness tampering, a charge Pilot Flying J's criminal lawyer, Aubrey Harwell of Nashville says is absurd. But the fact that Pilot Flying J has retained an attorney of Harwell's renown is a clear sign of just how serious this matter is and seriously the company is viewing it.
Other developments of concern for Pilot Flying J: The National Football League (according to USA TODAY 3/22) is "very, very concerned" about the investigation although it does not plan to ask Jimmy Haslam, the new owner of the Cleveland Browns franchise, to step aside while the probe continues. Moody's Investors Service is concerned too. According to THE NASHVILLE BUSINESS JOURNAL (April 24), it has put Pilot on review for a downgrade of its credit rating.
Interestingly, other than saying its probe continues, federal investigators have made no comment about Flying J's other moves to salvage its reputation. That includes placing several unnamed top sales executives on administrative leave; hiring its own outside investigator (with a U.S. Justice Department background) to conduct an independent probe of the matter. Pilot has also ordered an internal audit of its direct fuel purchase program which involves some 3300 customers. It also plans to end its manual fuel rebate program as of June 30.
But while Pilot Flying J should be commended for continuing to be as open as it feels it can be in responding to the fraud investigation, serious reputational damage has obviously already been done, especially by the 120 page federal affidavit that portrayed company officials in a tawdry light in particular through comments they allegedly made that some of its customers were too unsophisticated to know they were being defrauded.
While none of this directly implicates Governor Haslam in any way, anything that casts a negative light on Pilot Flying J impacts him especially since it is the source of his own and his family's income, as well the origin of their political and business prominence.
It also appears given the length of time Pilot says it will take to do its own investigations and the fact that federal probes usually take time to come a conclusion, this cloud over the Governor and the company may be around for a while. With his 2014 re-election ahead next year that could prove problematic for Mr. Haslam, although he will be running for a second term more on his record over the last four years as governor than than on his business background and success which was critical when he was introducing himself to voters in 2010.
As for any national political ambitions, that's likely very much on hold. But then again, the Governor didn't seem to be pushing any efforts in that direction anyway until after he gained a second term.
ON A SHORT LEACH
As if Governor Haslam doesn't have enough to quietly fret about with the Pilot Flying J investigation, there's also this little "animal rights reform" bill that state lawmakers passed late last week before adjourning and skipping town for the year.
The measure is creating a stir nationally about Tennessee (again)…and it's not positive. The National Humane Association is airing TV spots in Nashville and Knoxville (spending at least $100,000) urging the Governor to veto the bill which requires the media and others who have information about animal abuse to turn over whatever they have to law enforcement officials within 48 hours. "This is an attempt to cover up abuses," says an agency spokesperson quoted in THE TENNESSEAN (April 23). The organization also got a boost from TV talk show host and comedian Ellen Degeneres who interviewed Humane officials on her show (aired on NEWSCHANNEL5) and she also urged the Governor to veto the bill.
The so-called "Ag-Gag" bill was already in the news after country music superstar Carrie Underwood said in a Twitter message last week that she would show up in protest on the Governor's front porch if he didn't use his veto pen. So far, the Governor says he is still studying the measure which he admits had not gotten his attention until late in the legislative session when it moved through both houses with unsettling quickness.
All the controversy seems to be creating a strong public reaction. WPLN Nashville Public Radio (April 24) reports that the Governor's office says it had already received 4,502 e-mails and 1,796 phone calls, almost all of them against the bill.
Besides a veto, the Governor could also either sign the bill into law or allow it to pass without his signature. Some say the latter move would be a way to show his displeasure. But I don't think so. Given the serious constitutional (First Amendment) issues it raises and the charge that is really a political "wolf in the sheep's clothing of reform," allowing this to become law would just be wrong, especially since the bill passed the House with just the bare minimum 50 votes needed for approval. While a gubernatorial veto in Tennessee is about as weak as it comes, this one might get sustained especially since it would likely be next January before an override effort would be attempted.
TO KEEP TENNESSEE FROM AN INCOME TAX
Both of Tennessee's U.S. Senators, Lamar Alexander and Bob Corker, say they support the Marketplace Fairness Act. It appears that measure is about to pass the upper chamber in Washington. The Senators say they support it because (at least in part) it will help the state "avoid an income tax."
Say what? I thought an income tax was already unconstitutional and besides hasn't the legislature put an amendment on the ballot for next year that will make sure legally an income tax can never happen? They have indeed. So why is this Marketplace bill so important?
"States' rights," say both Senators. More specifically, they both want Tennessee (and other states) to have the right, if they to, want to impose sales taxes on companies who don't already have a brick and mortar presence here. Given the trend in on-line sales, it could mean millions in new dollars for the state. It's also the fair thing to do say both Senators, since on-line sales taxes already apply to businesses which have a physical presence in the state.
But even if the Senate approves the bill, will the House follow suit? That appears far from certain. And will our Tennessee lawmakers ever impose a new sales tax for on-line, out of state purchases? A lot of conservative Tea-Party type Republicans sure don't like the idea, even though Senator Corker, in a news release from his office, cited the support of former Reagan economist (and conservative favorite) Arthur Laffer for the bill. Laffer now lives in Nashville and he has played a key role in advising state lawmakers in recent years to repeal Tennessee's taxes on estates, gifts, inheritance, and dividends. Will it happen again to approve a new sales tax on out of state, on-line purchases? And will it be done as yet another way to avoid a state income tax?
THE SUPER MAJORITY: TENNESSEE'S BE-ALL AND END ALL
In analyzing the most recent session of the Tennessee General Assembly, the only thing you have to remember is the Republican Super Majority. It's the be-all and end-all of Tennessee politics on the Hill these days.
When the Super Majority is united (workers comp changes, guns in parking lots for example) legislation passes with ridiculous ease. But If the Super Majority is divided ( vouchers, charter school legislation, judicial redistricting) things can get downright ugly, especially in the final hours when the two houses got mad at each other and killed the pet legislation of both speakers (charter school authorizer and judicial district reapportionment).
And then there's the crazy bills (the latest Don't Say Gay, the Cut Their Welfare Benefits if Kids Fail School measure, the numerous states' rights and nullification bills). They all had their moments (Stacy Campfield always sees to that for his proposals). But they didn't pass both houses except for the Ag-Gag bill, a measure whose fate is yet to be determined.
And there's the "wine in grocery stores" bill which made it further than ever on the Hill this year. But it died this time because a House committee chair went against the wishes of his Speaker. The implications of that are yet to be known but watch it.
The Super Majority is not finished in its quest to control state politics. They have continued the process to take control of the selection of both the Attorney General and all the state's Supreme Court and Appellate Judges. However in the meantime, the lawmakers' failure to allow the current judicial selection system to continue to function could mean no judicial vacancies can be filled after June 30 of this year, at least until the General Assembly returns in January. It's not likely to create a huge problem right away, but it is sloppy government for sure.
AND SO IT CONTINUES...
First it was the mysterious, expensive telephone poll. Now a potential candidate for mayor of Nashville in 2015 has named a treasurer so she can begin raising funds and exploring a race.
That's right it's still almost two and a half years away….but the next mayor's race has already started, believe it or not.
It is no surprise that Metro Councilmember At Large Megan Berry is interested in running. That's been rumored for years. I saw her last week at a social event and she admitted she had some decisions to make. She also pointed out at the time that those who needed to raise the money to run (couldn't fully or partially self-finance a race) might have to get in early. Of course, she didn't say that early might mean the very next week!
And don't be surprised to see others now start naming treasurers, raising money and exploring what to do, even though that will likely really annoy those running for all the judgeships and other courthouse offices on the ballot in 2014. The "open-seat" nature and the large expense (read millions of dollars) to run a big-city mayor's race may create a near "arms race" escalation to move up the campaign timetable. Or maybe it won't with candidates risking that the money they need will still be there for the asking even if they wait.
But it is still really early for this race to heat up. Look at the last time the seat was open in 2007. The first major candidate out was Bob Clement, who according to Wikipedia (so consider the source) announced an exploratory effort for mayor on February 15, 2006. That's about 18 months out from the August, 2007 primary. The Megan Barry announcement in contrast is 28 months out, or two years and 4 months before August, 2015. Wow!
By the way, Megan Barry's choice for treasurer is an experienced, successful one. Leigh Walton handled the same job for current Mayor Karl Dean in his races. However, (unless he says so) I wouldn't read her involvement as an endorsement of Barry by the Mayor. Megan Barry brings strong support to any mayor's race from many of the city's Democrats, progressives and neighborhood groups. She's probably got some work to do however with the business community. One other thing her early appointment of a treasurer for a Mayor's race does is end (for now) any speculation that Barry might run instead for the vice-mayor's seat (which is also open). Her At-Large colleague Tim Garrett has eyes of that, telling THE TENNESSEAN he is now "100% certain" he's running.
And so it begins….or should I say… continues for 2015.
Mayor Dean will be filing his proposed operating budget for the city this coming week (May 1 is the deadline). Look for potential drama in two areas.
One, for the first time in several years, the Mayor won't be "fully funding" the school board‘s request for extra money (over $40 million this year). Frankly such a policy is just not sustainable (given the annual hikes school officials have been asking for) even in a year following a property tax increase.
Now don't misunderstand the schools budget will definitely increase substantially from last year (maybe $20 to $25 million more). The fight may come because school officials will say the extra funds aren't enough to fund charter schools without cutting regular district schools. I suspect the Mayor will say there is enough, although in the final analysis it's up to the School Board to decide how it spends its funds not the Mayor or the Metro Council.
The second budget area to watch is the new property tax rate. The rate needs to be changed (lowered) because of the countywide property reappraisal which just concluded (it's required every four years). Because residential values went up only 1%, while overall values countywide, including commercial, went up nearly 6%, lots of folks may see their property taxes go down a bit. But, that's not true for everyone. In some parts of town, such as East Nashville and Hillsboro Village, residential values have grown more than the average (6%) so those property tax bills could go up (again).
So that could bring some political heartburn on where to set the rate. The state is still reviewing the matter for its approval, so the number filed next week is likely to change, but exactly how much we will have to wait and see.
As I write these words the Davidson County Election Commission is holding a special meeting about how to respond to a scathing state audit of its operations during the 2012 election cycle. Almost all the members are new on the job since that time, but the Elections Administrator who works for the Commission, was employed back then. He has hired his own legal counsel in the matter and after reading the state audit you might think you understand why he's taken that step.
Let's see what happens at the special meeting and we can discuss it next week.
REAL OR FAKE
Congress has done it again!
By overwhelming bipartisan votes in both houses, it has voted to soften the sequestration rules so air traffic controllers can stay on the job and not be furloughed to meet the automatic sequestration budget cuts. Lawmakers acted in the wake of increasing public complaints because the cutbacks were causing longer and longer flight delays across the country.
And when did Congress approve this legislation? How about just as members were packing their bags to FLY home to their states and districts to enjoy yet another recess (read vacation)! No flight delays for lawmakers I guess. You certainly have to admire their gall (some might call it cheekiness) as well as their perfect timing.
And then some want to say the furloughs and cuts were politics. Well, duh…I guess it takes one to know one, huh?
I spoke to a business group a couple of weeks ago about the sequestration. My talk title was: Sequestration: Real or Fake? Well, to many folks it seems so far to have been largely fake. But you can be sure when it gets too real for Congress, they'll vote to change it. That is except for the cuts in programs such as Head Start and Meals on Wheels. I guess members of Congress don't participate in that.
When I don't write about my progress recovering from the stroke, I get e-mails from readers reminding me they still want updates. So here goes.
I will be 10 months out April 28 (Sunday) and I go back to the doctor on Tuesday for a routine checkup. My blood pressure is very good and that's in part because I think I've learned how to keep it low even at night. I am doing some deep breathing exercises each evening and it keeps my numbers consistently below 120/80. They've always been that low in the mornings. So I am feeling really good about all that.
I am concerned about some diverticulitis symptoms I've had recently although I have not had any attacks or problems. I am also concerned I am developing an allergy or something. I feel like I have a persistent cold with some sneezing and a runny nose at times. It particularly bothers me that I can't sing very well. I have always taken pride in my voice. Now I am flat, very nasal and have limited range. Maybe I have finally developed the "full Nashville nose" from being around all the pollen (especially this spring),
All of this is more annoying than serious and my life style changes are still going well(using my sleep apnea machine each night, exercising with a Y trainer each week and doing some exercises at home, cutting back my diet soda intake to no more than one per day). I will see if I've lost or gained any weight. I'm betting I will be about the same.
So life is good. I am looking forward to rooting for my two daughters running in the Country Music Half-Marathon this weekend (and probably getting soaked in the rain) as well as celebrating my granddaughter's 4th birthday and my 39th wedding anniversary with my wife.
Life is good!
JOE CARR ON INSIDE POLITICS
Another race already at light speed compared to a "normal" election cycle is the 2014 congressional race in Tennessee's 4th District.
We've already had the embattled incumbent, Representative Scott DesJarlais on INSIDE POLITICS this year, as well as his one announced primary opponent, State Senator Jim Tracy.
This week on the show, we host another elected official who is looking (and raising money) to possibly enter the GOP fray, State Representative Joe Carr.
There's a lot to discuss with Representative Carr both about the race (recent fund raising disclosures) as well as issues in both Washington and in the recently concluded session of the Tennessee General Assembly.
During the show, Carr told me he will announce his congressional plans officially on Thursday, May 2, and given that he's amassed over $200,000 in the last 3 months, I'd say he'll be in for sure. During our conversation, he also says he thinks state lawmakers went too fast and shouldn't have adjourned so quickly this year. He also gives his thoughts on the Ag-Gag bill, the Marketplace Fairness Act and other legislative issues.
Watch us! It's very interesting conversation.
INSIDE POLITICS can be seen several times each weekend on the NEWSCHANNEL5 NETWORK. Our air times include 5:00 a.m. Sunday on the main channel, WTVF-TV NEWSCHANNEL5. We are also on NEWSCHANNEL5 PLUS at 7:00 p.m. Friday, 5:00 a.m. & 5:30 p.m., Saturday, and 5:00 a.m. & 12:30 p.m., Sunday. THE PLUS is on Comcast Cable channel 250, Charter Cable channel 150 and NEWSCHANNEL5's over-the-air digital channel. For those outside Nashville or who don't have cable access, portions of INSIDE POLITICS interviews are later posted on NEWSCHANNEL5.com.